By 2359 GMT, Beta diminished in strength to a tropical storm with sustained winds of up to 60 kilometers (40 miles) per hour and was expected to become a tropical depression, according to the US National Hurricane Center in Miami.

However, the NHC expected the storm to produce dangerous amounts of rain, some 25-38 centimeters (10-15 inches) across Nicaragua and eastern Honduras.

Powerful winds and heavy rain buffeted this small port city of 60,000, where local authorities announced a curfew to prevent looting and rushed to cut off electricity citywide in hopes of avoiding injuries.

The threat of mudslides loomed as the slow-moving storm menaced the coastline, according to national meteorology director Milagros Castro.

No fatalities related to the storm were reported, said army spokesman General Omar Hallesleven.

Beta was the record 23rd tropical storm and 13th hurricane of the Atlantic hurricane season.

It follows a week after the most powerful recorded hurricane, Wilma, devastated Mexico's Yucatan peninsula and then southern Florida.

Beta made landfall Sunday as a category-two hurricane on the one-to-five Saffir-Simpson intensity scale at Karawala, 100 kilometers (62 miles) south of Puerto Cabezas, wrecking a number of buildings and toppling trees.

Town mayor Gustavo Ramosa said about two-thirds of the town's 3,000 people had been evacuated from their homes during the night.

Earlier Nicaraguan President Enrique Bolanos had said there was neither the time nor the means to evacuate the city properly and that authorities should focus on getting everyone into stable shelters. Thousands of residents trudged through driving rains to reach shelters.

"House structures in Bilwi (Puerto Cabezas) are extremely fragile given the strength of Beta," the president said. "So from here on in we are asking the international community for its always generous solidarity with the people of Nicaragua."

Honduras, meanwhile, maintained a state of alert in 18 departments. President Ricardo Maduro said Spain, the United States, Britain and Japan had already offered assistance in coping with the storm's fallout.